Edwin Watts Golf has grown significantly during the past several years, expanding its store portfolio and direct mail and Internet businesses as well. With growth came an increased complexity that taxed the capabilities of its aging legacy systems, which did not provide visibility across channels and among stores. The retailer decided it was time to invest in a new solution due to the age and fragmentation of its existing systems.
"Fundamentally, we had a legacy system with old hardware and three fragmented software systems," explained Lynda Barr, CFO, Edwin Watts Golf, Fort Walton Beach, Fla. "It would have taken a significant investment to our AS/400 hardware as well as various other software upgrades to bring the systems current, and we thought it would be better to invest in a new, fully integrated ERP option."
In selecting a new retail solution, Edwin Watts had an important priority: It had to be multichannel.
"We have retail operations as well as a call center and website, and we needed a solution that could service all segments," Barr said. "As a specialty retailer, we knew we wouldn’t find something that would be an exact fit ‘out of the box.’ We needed to have a solution that had a high degree of flexibility and ease of customization."
In reviewing the top-performing retail applications, the Edwin Watts team looked for vendors that could support the chain’s multichannel model and deliver inventory/warehouse management, point of sale and general ledger in a single system. After reviewing the solutions against a 215-point functional specification, the retailer decided on Microsoft Dynamics for Retail.
"We wanted to service the customer consistently and share customer information across all channels — retail operations, call center and website all needed to operate through one system," Barr said. "Microsoft Dynamics for Retail gives us one view into our business performance."
Another advantage of the Microsoft solution was that it gave Edwin Watts the flexibility to select the partner that would deploy the system.
"From an IT perspective we viewed that choice as a positive differentiator," Barr said.
Barr and her team were also impressed by the availability of a wide range of third-party add-ons that provide specific custom functionality within Microsoft Dynamics for Retail. (The initial deployment at Edwin Watts includes Certified for Microsoft Dynamics solutions that help with bank reconciliations, tax calculation and Wi-Fi mobile inventory management.)
"Because of the Microsoft Dynamics partner model, there were multiple companies that we could choose from for that custom functionality," Barr said.
The Microsoft solution went live at the end of January and, at presstime, Edwin Watts was in a settle-down period. (The system was deployed by Ignify, the 2012 Microsoft Dynamics Partner of the Year, which also did the implementations for Microsoft’s retail stores.)
"We will have additional phases to continue to expand the functionality of the system," Barr added.
As to the benefits of the new system, Barr thinks the biggest asset is on the inventory management side.
"The Microsoft Dynamics for Retail solutions allows us to centralize purchasing and optimize inventory across all channels and locations," she said. "We will be able to improve our customer service efforts because of centralized inventory management."
Retailers are putting an increased emphasis and value on how and when they use their workforce. And in doing so, they are on the right path, according to research from The Wharton School. The study found the associate payroll was the most important factor in determining revenue. A mere additional dollar (properly applied) on labor could reap rewards of $4 to $28 in return.
"The rating of store associate knowledge had the second biggest impact on sales," said professor Marshall Fisher, during a panel presentation at the National Retail Convention & Expo in New York City. (The third factor was product availability or the in-stock situation.)
Additional Wharton research found that most retailers could "significantly boost their revenue simply by changing one planning metric." That is, by linking staffing levels to store traffic, rather than revenue. Many retailers are already using traffic counters to ascertain customer patterns, according to Fisher.
"And I think more and more retailers are looking at improving conversion," he said. Norm Daigle, manager of labor and productivity for Hannaford Bros. Co., a 180-store grocer based in Scarborough, Maine, said the chain recently added an automated scheduling program in three service departments — meat, produce and seafood — that incorporates foot traffic data in 15-minute increments. (The retailer has used time and attendance and forecasting and scheduling solutions from Kronos for several years.)
The result has been a redistribution of labor and "even adding some labor," Daigle said during the presentation.
"We realized it was critical to be well-staffed from 4 p.m. to 7 p.m. weekdays," he added. "It made us better positioned in the evening hours when many people are picking up dinner on the way home. The opportunity to improve service levels is something that is top of mind for me."
For Hannaford, workforce management has been an evolving strategy.
"Out of the gate, it was about controlling costs," Daigle explained. "But over time, it has evolved to a position where it is really about the customer experience in our stores."
Hannaford recently enhanced its workforce management strategy with the addition of Kronos’ labor analytics application and next-generation user interface. The analytics solution will enable Hannaford to identify, predict and manage opportunities for cost savings and productivity gains — all while ensuring a consistent and positive shopping experience.
Ocean State Job Lot is thinking along the same lines. The 109-store close-out retailer installed Kronos’ workforce HR tool and is using it to run time and attendance. Ocean State is also implementing a program to create store schedules, freeing up store managers.
"This saves time, but more importantly, it allows us to better utilize our [labor] resources by aligning them closer to customer traffic in the front door, the merchandise flow in the back door and the tasks assigned to the stores from corporate," said David Gouveia, project manager, Ocean State Job Lot, Kingston, R.I. "We are not trying to cut costs but to do more with our existing budget."
One thing is certain: Management buy-in is critical to the success of workforce management tools.
"If management doesn’t buy in, the employees won’t buy in. If you don’t have adoption by store-level management, you won’t be successful," Gouveia said.
Laura Klepacki is a contributing editor to Chain Store Age.
Focus on: Mobility
Mobility is sure to play an increasingly important role in Macy’s omnichannel future, both in commerce and marketing. But don’t look for the company to take a cookie-cutter approach.
"Between QR codes, what we’re doing on Facebook and Instagram that is feeding into our mobile app, what we do with shopkick — everybody is different and that is why personalization becomes so important, because there isn’t just one cookie-cutter approach to it," said Martine Reardon, chief marketing officer, Macy’s Inc. "The more that you can understand the customer, the better you will be at designing offers for her."
Speaking at the National Retail Federation Convention’s 102nd Convention & Expo in New York City, Reardon said Macy’s has embraced mobile as a multitasking tool to help the nation’s largest department store chain better serve its customers.
"Mobile is our communication tool," Reardon said. "Using the mobile device to communicate with our customers is probably the most important thing."
Notable on the m-commerce side, the department store retailer is making its first foray into mobile wallets. Macy’s is currently conducting tests with Google Wallet in five markets and is piloting Isis, the wireless carrier-driven mobile solution, in another two markets. Expect mobile wallets to be a major focus during the next two years, according to Reardon.
Emphasizing an omnichannel approach, Macy’s sees mobile as a way to bridge online and in-store silos, and drive incremental sales. At Macy’s New York City flagship, for example, sales associates on the expanded shoe floor (billed as "the world’s largest shoe floor," with more than 250,000 pairs of shoes), use iPod Touch devices as cash registers.
The devices also provide detailed product information and allow associates to determine the availability of a given size and style on the spot. If the item is not in stock, the associate can locate it elsewhere and have it shipped in two days.
"The mobile access is one of the biggest reasons we are having such success on that floor," Reardon said.
QR CODES: Another growing technology is the use of QR codes. One application for the Bobbi Brown cosmetics counter leveraged content of a Macy’s TV commercial. By scanning the code customers could view on their own devices, makeup artist Bobbi Brown demonstrating how to create a smoky eye. The brand’s sales "exponentially doubled," reported Reardon. While the video wasn’t explicitly selling anything, it provided product information "right in the palm of her hand," she added.
And like travelers using GPS to map out journeys, in kind, over Black Friday weekend Macy’s offered an app, devised with help from eBay and GSI Commerce, which guided shoppers to where sale items were in each of its stores.
"If a shopper is on a mission, if they have gotten up at midnight to come shopping, they want to make sure they know where they are going," Reardon explained.
In December, the retailer unveiled an updated version of its Macy’s app featuring a tiled layout, a bar-code scanning function, and swipe and touch. Within 10 days of launch, 44% of its existing users had downloaded the new version.
"We find that coupons, particularly on a mobile device, are what is driving engagement and driving the commerce," Reardon said.
There is a separate app for the New York City flagship to aid shoppers as its goes through a four-year renovation. Along with a current directory, shoppers can make reservations and be alerted when their lunch table is ready or when it is their turn at Santaland.
One of its biggest promotional assets — the Macy’s Thanksgiving Day Parade — is honored with an app too. People are able to learn more about the historic parade, find restrooms and coffee spots along the 2.5-mile route, and even turn themselves into virtual elf balloons and float along just by uploading a photo.